wbu^ 

University  of  California  •  Berkeley 


Representation 


in 


Industry 


BY 

JOHN  D.  ROCKEFELLER,  JR. 


Representation 


in 


Industry 


BY 

JOHN  D.  ROCKEFELLER,  JR. 


Address  before  the 
War  Emergency  and  Reconstruction  Conference 

of  the 

Chamber  of  Commerce  of  the  United  States 

Atlantic  City,  N.  J. 

December  6.  1918 


Representation  in  Industry 
I 

A'  last  the  war  is  over.  Less  than  a 
month  ago  every  nerve  was  being 
strained  for  the  purpose  of  enlisting, 
training  and  equipping  four  million  men  to 
reinforce,  as  speedily  as  possible,  the  battle-worn 
but  unyielding  forces  of  our  Allies.  Every  wheel 
in  industry  was  turning  at  top  speed  to  supply 
munitions  and  the  necessities  of  war. 

The  peoples  engaged  in  the  conflict  stood 
ready  to  stake  their  all  on  the  outcome  of  the 
struggle.  The  future  of  civilization  hung  in  the 
balance.  Was  the  iron  heel  to  trample  ruthlessly 
on  humanity,  or  was  Right  to  triumph  over 
Might? 

In  the  contest,  millions  of  lives  have  been 
sacrificed;  billions  of  dollars  expended;  rich 
treasure  destroyed;  cities,  towns  and  villages 
laid  waste;  vast  stretches  of  country  desolated. 
No  one  can  estimate  the  human  suffering, 
misery  and  sorrow  involved.  But  now,  thanks  to 

3 


R   E   P  R   E  6   E   N^T   ATION         IN          INDUSTRY 

the  indomitable  courage  of  the  allied  nations, 
backed  by  our  gallant  troops,  the  issue  has  been 
fought  out  and  tyranny  overthrown. 

Co-operation — 

A  Lesson  of  the  War 

The  war  has  taught  many  lessons;  one  of  the 
most  useful  is  the  value  of  co-operation. 

The  successful  outcome  of  the  conflict  was 
largely  the  result  of  the  most  complete  co-opera- 
tion. Irrespective  of  race,  color  or  creed,  men 
worked  and  fought  and  suffered  and  died,  side 
by  side.  The  kinship  of  humanity  has  come  to 
be  understood  as  never  before.  Common  danger, 
common  toil,  common  suffering  have  developed 
the  spirit  of  brotherhood. 

Today  we  stand  at  the  threshold  of  the  period 
of  reconstruction.  As  we  address  ourselves  to 
the  grave  problems  which  confront  us,  problems 
both  national  and  international,  we  may  look  for 
success  in  their  solution  just  in  so  far  as  we 
continue  to  be  animated  by  the  spirit  of  co- 
operation and  brotherhood.  The  hope  of  the 
future  lies  in  the  perpetuation  of  that  spirit. 
Only  as  those  who  sit  around  the  peace  table  are 
imbued  with  it,  will  their  efforts  result  in  an 
outcome  at  all  commensurate  with  the  price 
which  has  been  paid  for  peace. 

In  international  affairs  America  has  seen 
clearly  the  fundamentals  of  reconstruction,  and 
has  sought  to  enhance  human  well-being  by 


REPRESENTATION          IN          INDUSTRY 

co-operation  among  nations  and  the  establish- 
ment of  conditions  which  make  co-operation 
possible.  It  is  to  be  hoped  that  upon  the 
problems  of  national  reconstruction  she  will 
bring  to  bear  the  same  clearness  of  vision  and  the 
same  high  purpose.  Among  these  problems 
none  is  more  important  than  that  of  industry, 
none  more  pressing,  since  industry  touches 
almost  every  department  of  life.  It  is  this 
theme,  or,  more  particularly,  the  one  phase, 
"Representation  in  Industry,"  that  I  desire 
briefly  to  develop. 

Some  Fundamental 
Questions 

We  must  ask  ourselves  at  the  outset  certain 
fundamental  questions: 
First— 


What  is  the  purpose  of  industry? 

Shall  we  cling  to  the  conception  of  industry  as 
an  institution,  primarily  of  private  interest, 
which  enables  certain  individuals  to  accumulate 
wealth,  too  often  irrespective  of  the  well-being, 
the  health  and  the  happiness  of  those  engaged 
in  its  production? 

Or  shall  we  adopt  the  modern  viewpoint  and 
regard  industry  as  being  a  form  of  social  service, 
quite  as  much  as  a  revenue-producing  process? 

5 


REPRESENTATION          IN          INDUSTRY 

Is  it  not  true  that  any  industry,  to  be  per- 
manently successful,  must  insure  to  Labor 
adequately  remunerative  employment  under 
proper  working  and  living  conditions,  to  Capital 
a  fair  return  upon  the  money  invested,  and  to 
the  Community  a  useful  service? 

The  soundest  industrial  policy  is  that  which 
has  constantly  in  mind  the  welfare  of  employes 
as  well  as  the  making  of  profits,  and  which,  when 
human  considerations  demand  it,  subordinates 
profits  to  welfare.  Industrial  relations  are 
essentially  human  relations. 

It  is  therefore  the  duty  of  everyone  entrusted 
with  industrial  leadership  to  do  all  in  his  power 
to  improve  the  conditions  under  which  men 
work  and  live. 

The  day  has  passed  when  the  conception  of 
industry  as  chiefly  a  revenue-producing  process 
can  be  maintained.  To  cling  to  such  a  concep- 
tion is  only  to  arouse  antagonisms  and  to  court 
trouble. 

In  the  light  of  the  present,  every  thoughtful 
man  must  concede  that  the  purpose  of  industry 
is  quite  as  much  the  advancement  of  social  well- 
being  as  the  accumulation  of  wealth.  It  remains 
none  the  less  true,  however,  that  to  be  successful 
industry  must  not  only  serve  the  community  and 
the  workers  adequately,  but  must  also  realize  a 
just  return  on  capital  invested. 

6 


REPRESENTATION          IN          INDUSTRY 

Next,  we  must  ask  ourselves— 

Who  are  the  parties  to  industry? 

The  parties  to  industry  are  four  in  number: 
they  are  Capital,  Management,  Labor  and  the 
Community. 

Capital  is  represented  by  the  stockholders  and 
is  usually  regarded  as  embracing  Management. 

Management  is,  however,  an  entirely  separate 
and  distinct  party  to  industry — its  function  is 
essentially  administrative;  it  comprises  the 
executive  officers,  who  bring  to  industry  tech- 
nical skill  and  managerial  experience. 

Labor  consists  of  the  employes. 

Labor,  like  Capital,  is  an  investor  in  industry, 
but  Labor's  contribution,  unlike  that  of  Capital, 
is  not  detachable  from  the  one  who  makes  it, 
since  it  is  in  the  nature  of  physical  effort  and  is 
a  part  of  the  worker's  strength  and  Me. 

Here  the  list  usually  ends.  The  fourth  party, 
mamely,  the  Community,  whose  interest  is  vital, 
and  in  the  last  analysis  controlling,  is  too  often 
ignored. 

The  Community's  right  to  representation  in 
the  control  of  industry  and  in  the  shaping  of 
industrial  policies  is  similar  to  that  of  the  other 
parties.  Were  it  not  for  the  Community's 
contribution,  in  maintaining  law  and  order,  in 
providing  agencies  of  transportation  and  com- 


REPRESENTATION          IN          INDUSTRY 

munication,  in  furnishing  systems  of  money  and 
credit  and  in  rendering  other  services — all 
involving  continuous  outlays — the  operation  of 
Capital,  Management  and  Labor  would  be 
enormously  hampered,  if  not  rendered  well  nigh 
impossible. 

The  Community,  furthermore,  is  the  con- 
sumer of  the  product  of  industry  and  the  money 
which  it  pays  for  the  product  reimburses  Capital 
for  its  advances  and  ultimately  provides  the 
wages,  salaries  and  profits  that  are  distributed 
among  the  other  parties. 

Finally  we  must  inquire 


What  are  the  relations 
between  the  four  parties  to  industry? 

It  is  frequently  maintained  that  the  parties  to 
industry  must  necessarily  be  hostile  and  antag- 
onistic. I  am  convinced  that  the  opposite  is  true ; 
that  they  are  not  enemies  but  partners ;  and  that 
they  have  a  common  interest. 

Moreover,  success  cannot  be  brought  about 
through  the  assumption  by  any  one  party  of  a 
position  of  dominance  and  arbitrary  control; 
rather  it  is  dependent  upon  the  co-operation 
of  all  four.  Partnership,  not  enmity,  is  the 
watchword. 


REPRESENTATION          IN          INDUSTRY 


II 


If  co-operation  between  the  parties  to  indus- 
try is  sound  business  and  good  social  economics, 
why,  then,  is  antagonism  so  often  found  in  its 
stead?  The  answer  is  revealed  in  a  survey  of 
the  development  of  industry. 

Loss  of  the 
Personal  Relation 

In  the  early  days  of  Industry,  the  functions  of 
Capital  and  Management  were  not  infrequently 
combined  in  the  one  individual,  wiio  was  the 
employer.  He  in  turn  was  in  constant  touch  with 
his  employes.  Together  they  formed  a  vital 
part  of  the  community.  Personal  relations 
were  frequent  and  mutual  confidence  existed. 
When  differences  arose  they  were  quickly 
adjusted. 

As  industry  developed,  aggregations  of  capital 
larger  than  a  single  individual  could  provide, 
were  required.  In  answer  to  this  demand,  the 
corporation,  with  its  many  stockholders,  was 
evolved.  Countless  workers  took  the  place  of 
the  handful  of  employes  of  earlier  days.  Plants 
scattered  all  over  the  country  superseded  the 
single  plant  in  a  given  community. 

Obviously,  this  development  rendered  impos- 
sible the  personal  relations  which  had  existed 


REPRESENTATION          IN         INDUSTRY 

in  industry,  and  lessened  the  spirit  of  common 
interest  and  understanding.  Thus  the  door  was 
opened  to  suspicion  and  distrust ;  enmity  crept  in ; 
antagonisms  developed.  The  parties  to  industry 
came  to  view  each  other  as  enemies  instead  of 
as  friends  and  partners,  and  to  think  of  their 
interests  as  antagonistic  rather  than  common. 

It  is  to  be  regretted  that  there  are  capitalists 
who  regard  Labor  as  their  legitimate  prey,  from 
whom  they  are  justified  in  getting  all  they  can 
for  as  little  as  may  be.  It  is  equally  to  be 
deplored  that  on  the  part  of  Labor  there  is  often 
a  feeling  that  it  is  justified  in  wresting  everything 
possible  from  Capital.  Where  such  attitudes 
have  been  assumed,  a  gulf  has  opened  be- 
tween Capital  and  Labor  which  has  continually 
widened. 

Thus  the  two  forces  have  come  to  work  against 
each  other,  each  seeking  solely  to  promote  its 
own  selfish  ends.  As  a  consequence  have  come, 
all  too  frequently,  the  strike,  the  lockout  and 
other  incidents  of  industrial  warfare. 

The  Worker's  Sense  of  Isolation 
and  Detachment 

Then,  too,  as  industry  has  become  increasingly 
specialized,  the  workman  of  today,  instead  of 
following  the  product  through  from  start  to 
finish  and  being  stimulated  by  the  feeling  that 
he  is  the  sole  creator  of  a  useful  article,  as  was 
more  or  less  the  case  in  early  days,  now  devotes 

10 


REPRESENTATION          IN          INDUSTRY 

his  energies  for  the  most  part  to  countless 
repetitions  of  a  single  act  or  process,  which  is 
but  one  of  perhaps  a  hundred  operations 
necessary  to  transform  the  raw  material  into  the 
finished  product. 

The  worker  loses  sight  of  the  significance  of 
the  part  he  plays  in  industry  and  feels  himself 
to  be  merely  one  of  many  cogs  in  a  wheel.  All 
the  more,  therefore,  is  it  necessary  that  he 
should  have  contact  with  men  engaged  in  other 
processes  and  fulfilling  other  functions  in  indus- 
try, that  he  may  still  realize  he  is  a  part,  and  a 
necessary  though  it  may  be  inconspicuous  part, 
of  a  great  enterprise. 

In  modern  warfare,  those  who  man  the  large 
guns  find  the  range  not  by  training  the  gun  on 
the  object  which  they  are  seeking  to  reach,  but 
in  obedience  to  a  mechanical  formula  which  is 
worked  out  for  them.  Stationed  behind  a  hill 
or  mound,  they  seldom  see  the  object  at  which 
their  deadly  fire  is  directed.  One  can  readily 
imagine  the  sense  of  detachment  and  ineffective- 
ness which  must  come  over  these  men. 

But  when  the  airplane,  circling  overhead, 
gets  into  communication  with  the  gunner  be- 
neath and  describes  the  thing  to  be  accomplished 
and  the  effectiveness  of  the  shot,  a  new  meaning 
comes  into  his  life.  In  a  second  he  has  become 
a  part  of  the  great  struggle.  He  knows  that 
his  efforts  are  counting,  that  he  is  helping  to 

11 


REPRESENTATION          IN          INDUSTRY 

bring  success  to  his  comrades.  There  comes  to 
him  a  new  enthusiasm  and  interest  in  his  work. 

The  sense  of  isolation  and  detachment  from 
the  accomplishments  of  industry,  which  too 
often  comes  to  the  workers  of  today,  can  be 
overcome  only  by  contact  with  the  other  con- 
tributing parties.  Where  such  contact  is  not 
possible  directly,  it  must  be  brought  about 
indirectly  through  representation.  In  this  way 
only  can  common  purpose  be  kept  alive,  indi- 
vidual interests  safeguarded  and  the  general 
welfare  promoted. 

The  co-operation  in  war  service  of  Labor, 
Capital,  Management  and  Government  has 
afforded  a  striking  and  most  gratifying  illustra- 
tion of  this  truth. 

Basic  Principles 
Always  Applicable 

The  basic  principles  governing  the  relations 
between  the  parties  to  industry  are  as  applicable 
in  the  successful  conduct  of  industry  today  as  in 
earlier  times. 

The  question  which  now  confronts  the  student 
of  industrial  problems  is  how  to  re-establish 
personal  relations  and  co-operation  in  spite  of 
changed  conditions.  The  answer  is  not  doubtful 
or  questionable,  but  absolutely  clear  and  un- 
mistakable: It  is,  through  adequate  representa- 
tion of  the  four  parties  in  the  councils  of 
industry. 

12 


REPRESENTATION          IN          INDUSTRY 


III 


Various  methods  of  representation  in  industry 
have  been  developed,  conspicuous  among  which 
are  those  of  labor  unions  and  employers' 
associations. 

As  regards  the  organization  of  Labor,  it  is  just 
as  proper  and  advantageous  for  Labor  to  asso- 
ciate itself  into  organized  groups  for  the  advance- 
ment of  its  legitimate  interests  as  for  Capital  to 
combine  for  the  same  objects.  Such  associa- 
tions of  Labor  manifest  themselves  in  collective 
bargaining,  in  an  effort  to  secure  better  working 
and  living  conditions,  in  providing  machinery 
whereby  grievances  may  easily  and  without 
prejudice  to  the  individual  be  taken  up  with  the 
Management.  Sometimes  they  provide  benefit 
features,  sometimes  they  seek  to  increase  wages, 
but  whatever  their  specific  purpose,  so  long  as  it 
is  to  promote  the  well-being  of  the  employes, 
having  always  due  regard  for  the  just  interests 
of  the  employer  and  the  public,  leaving  every 
worker  free  to  associate  himself  with  such 
groups  or  to  work  independently,  as  he  may 
choose,  they  are  to  be  encouraged. 

But  organization  is  not  without  its  dangers. 
Organized  Capital  sometimes  conducts  itself 
in  an  unworthy  manner,  contrary  to  law  and 

13 


REPRESENTATION          IN          INDUSTRY 

in  disregard  of  the  interest  both  of  Labor  and  the 
public.  Such  organizations  cannot  be  too  strongly 
condemned  or  too  vigorously  dealt  with.  Al- 
though they  are  the  exception,  such  publicity  is 
generally  given  to  their  unsocial  acts  that  all 
organizations  of  Capital,  however  rightly  man- 
aged or  broadly  beneficent,  are  thereby  brought 
under  suspicion. 

Likewise  it  sometimes  happens  that  organiza- 
tions of  Labor  are  conducted  without  just  regard 
for  the  rights  of  the  employer  or  of  the  public ; 
methods  and  practices  are  adopted  which, 
because  unworthy  or  unlawful,  are  deserving 
of  public  censure.  Such  organizations  of  Labor 
bring  discredit  and  suspicion  upon  other  organi- 
zations which  are  legitimate  and  useful,  just  as 
is  the  case  with  improper  organizations  of 
Capital,  and  they  should  be  similarly  dealt  with. 

We  ought  not,  however,  to  allow  the  occasional 
failure  in  the  working  of  the  principle  of  the 
organization  of  Labor  to  prejudice  us  against  the 
principle  itself,  for  the  principle  is  fundamentally 
sound. 

In  the  further  development  of  the  organization 
of  Labor  and  of  large  business,  the  public 
interest  as  well  as  the  interest  of  Labor  and  of 
Capital  will  be  furthest  advanced  by  whatever 
stimulates  every  man  to  do  the  best  work  of 
which  he  is  capable;  by  a  fuller  recognition  of  the 
common  interests  of  employers  and  employed; 

14 


REPRESENTATION          IN          INDUSTRY 

and  by  an  earnest  effort  to  dispel  distrust  and 
hatred  and  to  promote  good-will. 

The  Need  for  Fuller  Representation 
of  Labor  and  Capital 

Labor  unions  have  secured  for  Labor  in 
general  many  advantages  in  hours,  wages  and 
standards  of  working  conditions.  A  large 
proportion  of  the  workers  of  the  country, 
however,  are  outside  of  these  organizations,  and 
unless  somehow  represented  are  not  in  a  position 
to  bargain  collectively.  Therefore,  representa- 
tion of  Labor  to  be  adequate  must  be  more 
comprehensive  and  all  inclusive  than  anything 
thus  far  attained. 

Representation  on  the  employers'  side  has 
been  developed  through  the  establishment  of 
trade  associations,  the  purpose  of  which  is  to 
discuss  matters  of  common  interest  and  to  act 
in  so  far  as  is  legally  permissible  and  to  the  com- 
mon advantage,  along  lines  that  are  generally 
similar.  But  here  also  representation  is  in- 
adequate. Many  employers  do  not  belong  to 
employers'  associationsa 

Representation  of  Labor  and  Capital 
through  the  War  Labor  Board 

Since  the  United  States  went  into  the  war,  the 
representation  of  both  Labor  and  Capital  in 
common  councils  has  been  brought  about  through 
the  War  Labor  Board,  composed  equally  of  men 

15 


REPRESENTATION          IN          INDUSTRY 

from  the  ranks  of  Labor  and  Capital,  together 
with  representatives  of  the  public.  When 
differences  have  arisen  in  industries  where  there 
was  no  machinery  to  deal  with  such  matters,  the 
War  Labor  Board  has  stepped  in  and  made  its 
findings  and  recommendations.  In  this  way, 
relatively  continuous  operation  has  been  made 
possible  and  the  resort  to  the  strike  and  lockout 
has  been  less  frequent. 

Industrial  Investigations 
in  England 

In  England  there  have  been  made  during  the 
past  year  three  important  Government  investi- 
gations and  reports  looking  toward  a  more 
complete  program  of  representation  and  co- 
operation on  the  part  of  Labor  and  Capital.  The 
first  is  commonly  known  as  the  Whitley  Report, 
made  by  the  Reconstruction  Committee,  now 
the  Ministry  of  Reconstruction,  through  a  Sub- 
Committee  on  Relations  between  Employers 
and  Employed,  of  which  the  Rt.  Hon.  J.  H. 
Whitley,  M.P.,  was  Chairman. 

The  Principle  of  Representative  Government 
Applied  to  Industry 

To  a  single  outstanding  feature  the  Whitley 
Report  owes  its  distinction.  It  applies  to  the 
whole  of  industry  the  principle  of  representative 
government.  In  brief,  its  recommendations  are 
that  in  the  various  industries  and  trades  there 
should  be  formed  joint  industrial  councils — 

16 


REPRESENTATION          IN          INDUSTRY 

national,  district  and  * 'works."  Labor  and 
Capital  are  to  be  equally  represented  in  each, 
and  the  councils  presided  over  by  impartial  or 
neutral  officers. 

These  recommendations  are  of  additional 
interest  and  value  in  that  at  once  the  existing 
forms  of  organization,  both  of  Labor  and  Capi- 
tal, are  availed  of  and  made  the  basis  for  the 
new  co-operative  councils,  with  such  additions 
only  as  may  be  necessary. 

Features  of  the 
Whitley  Report 

The  national  councils  would  be  composed  of 
representatives  of  the  national  trades  unions  on 
the  one  hand  and  representatives  of  the  national 
employers'  associations  on  the  other. 

District  councils  would  include  representatives 
of  district  trades  unions  and  employers'  associa- 
tions. 

In  the  works  councils  or  works  committees,  as 
they  are  commonly  called,  representatives  of 
employers  and  employes  would  sit  together  in 
joint  conference  and  would  be  in  close  co-opera- 
tion with  the  district  and  national  councils. 

The  function  of  the  works  committee  is  to 
establish  better  relations  between  employers  and 
employed  by  granting  to  the  latter  a  larger  share 
in  the  consideration  of  matters  with  which  they 
are  concerned. 

17 


REPRESENTATION          IN         INDUSTRY 

The  Whitley  Plan  seeks  to  unite  the  organiza- 
tions of  Labor  and  of  Capital  by  a  bond  of  com- 
mon interest  in  a  common  venture;  it  changes 
at  a  single  stroke  the  attitude  of  these  powerful 
aggregations  of  class  interest  from  one  of  mili- 
tancy to  one  of  social  service;  it  establishes  a  new 
relation  in  industry.  "Problems  old  and  new," 
says  the  report,  "will  find  their  solution  in  a 
frank  partnership  of  knowledge,  experience  and 
good-will." 

The  Report  of  the  Commission 
on  Industrial  Unrest 

Another  investigation  and  report  was  made 
by  a  Commission  on  Industrial  Unrest,  ap- 
pointed by  the  Prime  Minister.  This  Commis- 
sion made,  among  others,  the  following  interest- 
ing recommendations: 

1.  That  the  principle  of  the  Whitley  Report  as 
regards  industrial  councils  be  adopted. 

2.  That  each  trade  should  have  a  constitution. 

3.  That  Labor  should  take  part  in  the  affairs 
of  industry  as  partners  rather  than  as  employes 
in  the  narrow  sense  of  the  term. 

4.  That   closer   contact   should   be   set   up 
between  employers  and  employed. 

The  Report  of  the 
Ministry  of  Labor 

The  third  report  was  prepared  by  the  Ministry 
of  Labor.  This  report  deals  with  the  constitu- 

13 


REPRESENTATION          IN          INDUSTRY 

tion  and  operation  of  works  committees  in  a 
number  of  industries.  It  is  a  valuable  treatise  on 
the  objects,  functions  and  methods  of  procedure 
of  joint  committees. 

These  reports,  together  with  a  report  on 
reconstruction  made  by  the  British  Labor  party, 
outlining  its  reconstruction  program — a  most 
comprehensive  and  thoughtful  document — indi- 
cate something  of  the  extent  and  variety  of  the 
study  which  has  been  given  to  the  great  problem 
of  industrial  reconstruction  in  England. 

All  point  toward  the  need  of  more  adequate 
representation  of  Labor  in  the  conduct  of 
industry  and  the  importance  of  closer  relations 
between  Labor  and  Capital. 

The  Report  of  the 
Carton  Foundation 

Further  light  has  been  thrown  on  the  general 
questions  treated  by  these  inquiries  in  an  able 
report  made  by  the  Garton  Foundation  on  "The 
Industrial  Situation  After  the  War."  This 
report  is  a  study  of  the  more  permanent  causes 
of  industrial  friction  and  inefficiency,  and  of  the 
means  by  which  they  may  be  removed  or  their 
action  circumscribed. 


19 


REPRESENTATION         IN         INDUSTRY 


IV 


A  method  of  representation  similar  to  that 
suggested  in  the  Whitley  Report,  though  less 
comprehensive,  and  which  is  constructed  from 
the  bottom  up,  has  been  in  operation  for  varying 
periods  of  time  in  a  number  of  industries  in  this 
country,  including  the  Standard  Oil  Company  of 
New  Jersey,  the  Colorado  Fuel  &  Iron  Company, 
the  Consolidation  Coal  Company  and  others. 

The  Principle  of  Representation  as  Applied 
to  Certain  American  Industries 

This  plan  of  representation  is  worthy  of 
serious  consideration.  It  begins  with  the  elec- 
tion of  representatives  in  a  single  plant,  and  is 
capable  of  indefinite  development  to  meet  the 
complex  needs  of  any  industry  and  of  wide 
extension  so  as  to  include  all  industries.  Equally 
applicable  in  industries  where  union  or  non- 
union labor  or  both  are  employed,  it  seeks  to 
provide  full  and  fair  representation  to  Labor, 
Capital  and  Management,  taking  cognizance  of 
the  Community. 

Thus  far  it  has  developed  a  spirit  of  co-opera- 
tion and  good-will  which  commends  it  to  both 
employer  and  employe. 

20 


REPRESENTATION          IN          INDUSTRY 

Procedure  in  Effecting  Co-operation 
Through  Representation 

The   outstanding   features   of  this   plan   of 
industrial  representation  are  as  follows: 

Representatives  chosen  by  the  employes  in 
proportion  to  their  number,  from  their  fellow 
workers  in  each  plant,  form  the  basis  of  the 
plan. 

Joint  committees,  composed  of  equal  numbers 
of  employes  or  their  representatives  and  of 
officers  of  the  company  are  found  in  each  plant 
or  district. 

These  committees  deal  with  all  matters 
pertaining  to  employment,  and  working  and 
living  conditions,  including  questions  of  co- 
operation and  conciliation,  safety  and  accident, 
sanitation,  health  and  housing,  recreation  and 
education. 

Joint  conferences  of  representatives  of  em- 
ployes and  officers  of  the  company  are  held  in 
the  various  districts  several  times  each  year. 

There  is  also  an  annual  joint  conference,  at 
which  reports  from  all  districts  are  received  and 
considered. 

Another  important  feature  of  the  plan  is  an 

officer    known    as    the    President's    Industrial 

Representative,  whose  duty  it  is  to  visit  the 

plants  currently  and  confer  with  the  employes' 

21 


REPRESENTATION          IN          INDUSTRY 

representatives,  as  well  as  to  be  available  always 
for  conference  at  the  request  of  the  representa- 
tives. 

Thus  the  employes,  through  their  representa- 
tives chosen  from  among  themselves,  are  in 
constant  touch  and  conference  with  the  Manage- 
ment and  representatives  of  the  stockholders  in 
regard  to  matters  pertaining  to  their  common 
interest. 

Procedure  in  Matters 
Requiring  Adjustment 

The  employes'  right  of  appeal  is  a  third  out- 
standing feature  of  the  plan.  Any  employe  with 
a  grievance,  real  or  imaginary,  may  go  with  it 
at  once  to  his  representatives. 

The  representatives  not  infrequently  find  there 
is  no  ground  for  the  grievance  and  are  able  so  to 
convince  the  employe. 

But  if  a  grievance  does  exist,  or  dissatisfaction 
on  the  part  of  the  employe  continues,  the  matter 
is  carried  to  the  local  boss,  foreman  or  super- 
intendent, with  whom  in  the  majority  of  cases 
it  is  amicably  and  satisfactorily  settled. 

Further  appeal  is  open  to  the  aggrieved  em- 
ploye, either  in  person  or  through  his  representa- 
tives, to  the  higher  officers  and  to  the  president. 

If  satisfaction  is  not  to  be  had  from  the 
company,  the  court  of  last  appeal  may  be  the 
Industrial  Commission  of  the  State,  the  State 
Labor  Board,  or  a  committee  of  arbitration. 

22 


REPRESENTATION          IN          INDUSTRY 

Experience  shows  that  the  vast  majority  of 
difficulties  which  occur  in  an  industry  arise 
between  the  workmen  and  the  subordinate 
officers  who  are  in  daily  contact  with  them. 
Petty  officials  are  sometimes  arbitrary,  and  it  is 
by  their  attitude  and  action  that  the  higher 
officers  and  the  stockholders  are  judged. 

Obviously  the  right  of  appeal  from  the  deci- 
sions of  subordinate  officials  is  important,  even 
if  seldom  availed  of,  because  it  tends  of  itself  to 
modify  their  attitude. 

A  further  feature  of  the  plan  is  what  may  be 
termed  the  Employes'  Bill  of  Rights.  This 
covers  such  matters  as  the  right  to  caution  and 
suspension  before  discharge,  except  for  such 
serious  offenses  as  are  posted;  the  right  to  hold 
meetings  at  appropriate  places  outside  of  work- 
ing hours;  the  right  without  discrimination  to 
membership  or  non-membership  in  any  society, 
fraternity  or  union ;  and  the  right  of  appeal. 

Some  of  the  Results 
of  Representation 

Where  this  plan  has  been  in  operation  for  a 
considerable  length  of  time,  some  of  the  results 
obtained  are: 

First.  Uninterrupted  operation  of  the  plants 
and  continuous  employment  of  the  workers, 
resulting  in  larger  returns  for  both  Capital  and 
Labor. 

23 


REPRESENTATION          IN          INDUSTRY 

Second.    Improved  working  and  living  con- 
ditions. 

Third.    Frequent  and  close  contact  between 
employes  and  officers. 

Fourth.    The    elimination    of   grievances    as 
disturbing  factors. 

Fifth.    Good-will  developed  to  a  high  degree. 
Sixth.    The  creation  of  a  community  spirit. 

Furthermore,  the  plan  has  proved  an  effective 
means  of  enlisting  the  interest  of  all  parties  to 
industry,  of  reproducing  the  contacts  of  earlier 
days  between  employer  and  employe,  of  banish- 
ing misunderstanding,  distrust  and  enmity,  and 
securing  co-operation  and  the  spirit  of  brother- 
hood. 

Under  its  operation,  the  participants  in  indus- 
try are  being  convinced  of  the  soundness  of  the 
proposition  that  they  are  fundamentally  friends 
and  not  enemies,  that  their  interests  are  com- 
mon, not  opposed.  Moreover,  prosperity,  good- 
will and  happiness  are  resulting.  Based  as  the 
plan  is  upon  principles  of  justice  to  all,  its 
success  can  be  counted  on  so  long  as  it  is  carried 
out  in  a  spirit  of  sincerity  and  fair  play. 

Representation  in  Industry  Capable 
of  Widest  Expansion 

Here,  then,  would  seem  to  be  a  method  of 
providing  representation  which  is  just,  which  is 

24 


REPRESENTATION          IN          INDUSTRY 

effective,  which  is  applicable  to  all  employes 
whether  organized  or  unorganized,  to  all  em- 
ployers whether  in  associations  or  not,  which 
does  not  compete  or  interfere  with  existing 
organizations  or  associations,  and  which,  while 
developed  in  a  single  industrial  corporation  as  a 
unit,  may  be  expanded  to  include  all  corporations 
in  the  same  industry  and  ultimately  all  industries. 

Just  what  part  labor  organizations  and  em- 
ployers' associations  can  best  take  in  such  a  plan 
remains  to  be  worked  out,  but  certain  it  is  that 
some  method  should  be  devised  which  will 
profit  to  the  fullest  extent  by  the  experience,  the 
strength  and  the  leadership  of  these  groups. 

While  doubtless  defects  will  appear  in  this 
plan  and  other  methods  more  successfully 
accomplishing  the  same  end  may  be  developed,  at 
least  it  is  proving  that  in  unity  there  is  strength, 
and  that  a  spirit  of  co-operation  and  brotherhood 
in  industry  is  not  only  idealistically  right  but 
practically  workable. 


v 


If  the  points  which  I  have  endeavored  to  make 
are  sound,  might  not  the  four  parties  to  industry 
subscribe  to  an  Industrial  Creed  somewhat  as 
follows? 

25 


RE   PRESENTATION          IN          INDUSTRY 

1.  I   believe   that   Labor   and   Capital   are 
partners,  not  enemies;  that  their  interests  are 
conlmon,  not  opposed;  and  that  neither  can 
attain  the  fullest  measure  of  prosperity  at  the 
expense  of  the  other,  but  only  in  association 
with  the  other. 

2.  I  believe  that  the  Community  is  an  essen- 
tial party  to  industry  and  that  it  should  have 
adequate  representation  with  the  other  parties. 

3.  I  believe  that  the  purpose  of  industry  is 
quite  as  much  to  advance  social  well-being  as 
material  prosperity;  that,  in  the  pursuit  of  that 
purpose,  the  interests  of  the  Community  should 
be  carefully  considered,  the  well-being  of  em- 
ployes fully  guarded,  Management  adequately 
recognized  and  Capital  justly  compensated,  and 
that  failure  in  any  of  these  particulars  means 
loss  to  all  four  parties. 

4.  I  believe  that  every  man  is  entitled  to  an 
opportunity  to  earn  a  living,  to  fair  wages,  to 
reasonable  hours  of  work  and  proper  working 
conditions,  to  a  decent  home,  to  the  opportunity 
to  play,  to  learn,  to  worship  and  to  love,  as  well 
as  to  toil,  and  that  the  responsibility  rests  as 
heavily  upon  industry  as  upon  government  or 
society,  to  see  that  these  conditions  and  oppor- 
tunities prevail. 

5.  I  believe  that  diligence,  initiative  and 
efficiency,  wherever  found,  should  be  encouraged 
and  adequately  rewarded,  and  that  indolence, 
indifference  and  restriction  of  production  should 
be  discountenanced. 

6.  I  believe  that  the  provision  of  adequate 
means  of  uncovering  grievances  and  promptly 

26 


REPRESENTATION          IN          INDUSTRY 

adjusting  them,  is  of  fundamental  importance  to 
the  successful  conduct  of  industry. 

7.  I  believe  that  the  most  potent  measure  in 
bringing  about  industrial  harmony  and  prosperity 
is   adequate  representation   of  the   parties   in 
interest;  that  existing  forms  of  representation 
should  be  carefully  studied  and  availed  of  insofar 
as  they  may  be  found  to  have  merit  and  are 
adaptable  to  conditions  peculiar  to  the  various 
industries. 

8.  I  believe  that  the  most  effective  structure 
of  representation  is  that  which  is  built  from  the 
bottom  up;  which  includes  all  employes,  which 
starts  with  the  election  of  representatives  and 
the  formation  of  joint  committees  in  each  indus- 
trial plant,  proceeds  to  the  formation  of  joint 
district  councils  and  annual  joint  conferences  in 
a  single  industrial  corporation,  and  admits  of 
extension  to  all  corporations  in  the  same  industry, 
as  well  as  to  all  industries  in  a  community,  in  a 
nation,  and  in  the  various  nations. 

9.  I  believe  that  the  application  of  right 
principles  never  fails  to  effect  right  relations; 
that  "the  letter  killeth  but  the  spirit  giveth  life" ; 
that  forms  are  wholly  secondary,  while  attitude 
and  spirit  are  all  important;  and  that  only  as  the 
parties  in  industry  are  animated  by  the  spirit  of 
fair  play,  justice  to  all  and  brotherhood,  will  any 
plan  which  they  may  mutually  work  out  succeed. 

10.  I   believe  that  that  man  renders   the 
greatest  social  service  who  so  co-operates  in  the 
organization  of  industry  as  to  afford  to  the 
largest  number  of  men  the  greatest  opportunity 
for  self  development  and  the  enjoyment  of  those 
benefits  which  their  united  efforts  add  to  the 
wealth  of  civilization. 

27 


REPRESENTATION         IN         INDUSTRY 


VI 

In  the  days  when  kings  and  queens  reigned 
over  their  subjects,  the  gratification  of  the 
desires  of  those  in  high  places  was  regarded  as  of 
supreme  moment,  but  in  these  days  the  selfish 
pursuit  of  personal  ends  at  the  expense  of  the 
group  can  and  will  no  longer  be  tolerated. 

Men  are  rapidly  coming  to  see  that  human  life 
is  of  infinitely  greater  value  than  material 
wealth;  that  the  health,  happiness  and  well- 
being  of  the  individual,  however  humble,  is 
not  to  be  sacrificed  to  the  selfish  aggrandizement 
of  the  more  fortunate  or  more  powerful. 

Modern  thought  is  placing  less  emphasis  on 
material  considerations.  It  is  recognizing  that 
the  basis  of  national  progress,  whether  industrial 
or  social,  is  the  health,  efficiency  and  spiritual 
development  of  the  people. 

Never  was  there  a  more  profound  belief  in 
human  life  than  today.  Whether  men  work  with 
brain  or  brawn,  they  are  human  beings,  and  are 
much  alike  in  their  cravings,  their  aspirations, 
their  hatreds,  and  their  capacity  for  suffering  and 
for  enjoyment. 

The  Attitude  of  Leaders 

in  the  Period  of  Reconstruction 

As  the  leaders  of  industry  face  this  period  of 
reconstruction,  what  will  their  attitude  be? 

28 


REPRESENTATION          IN          INDUSTRY 

Will  it  be  that  of  the  standpatters,  who  ignore 
the  extraordinary  changes  which  have  come  over 
the  face  of  the  civilized  world  and  have  taken 
place  in  the  minds  of  men;  who,  arming  them- 
selves to  the  teeth,  attempt  stubbornly  to  resist 
the  inevitable  and  invite  open  warfare  with  the 
other  parties  in  industry;  and  who  say,  "What 
has  been  and  is,  must  continue  to  be — with  our 
backs  to  the  wall  we  will  fight  it  out  along  the 
old  lines  or  go  down  in  defeat"? 

Those  who  take  such  an  attitude  are  wilfully 
heedless  of  the  fact  that  its  certain  outcome  will 
be  financial  loss,  general  inconvenience  and  suffer- 
ing, the  development  of  bitterness  and  hatred, 
and  in  the  end  submission  to  far  more  drastic  and 
radical  conditions  imposed  by  legislation,  if  not 
by  force,  than  could  now  be  amicably  arrived  at 
through  mutual  concession  in  friendly  confer- 
ence. 

Or  will  their  attitude  be  one  in  which  I  myself 
profoundly  believe,  which  takes  cognizance  of 
the  inherent  right  and  justice  of  the  principle 
underlying  the  new  order;  which  recognizes  that 
mighty  changes  are  inevitable,  many  of  them 
desirable;  and  which  does  not  wait  until  forced  to 
adopt  new  methods,  but  takes  the  lead  in  calling 
together  the  parties  to  industry  for  &  round- 
table  conference  to  be  held  in  a  spirit  of  justice, 
fair  play  and  brotherhood,  with  a  view  to  work- 
ing out  some  plan  of  co-operation  which  will 

29 


REPRESENTATION          IN          INDUSTRY 

insure  to  all  those  concerned  adequate  represen- 
tation, and  afford  to  Labor  an  opportunity  to 
earn  a  fair  wage  under  such  conditions  as  shall 
leave  time  not  alone  for  food  and  sleep,  but  also 
for  recreation  and  the  development  of  the  higher 
things  of  life? 

The  Opportunity  for  Clear 
Vision  and  Broad  Sympathy 

Never  was  there  such  an  opportunity  as  exists 
today  for  the  industrial  leader  with  clear  vision 
and  broad  sympathy  permanently  to  bridge  the 
chasm  that  is  daily  gaping  wider  between  the 
parties  to  industry,  and  to  establish  a  solid 
foundation  for  industrial  prosperity,  social  im- 
provement and  national  solidarity. 

Future  generations  will  rise  up  and  call  those 
men  blessed  who  have  the  courage  of  their 
convictions,  a  proper  appreciation  of  the  value  of 
human  life  as  contrasted  with  material  gain,  and 
who,  imbued  with  the  spirit  of  brotherhood,  will 
lay  hold  of  the  great  opportunity  for  leadership 
which  is  open  to  them  today. 

Responsibility  for  the 
Development  of  the  Future 

In  conclusion  let  it  be  said  that  upon  the  heads 
of  those  leaders — it  matters  not  to  which  of  the 
four  parties  they  belong — who  refuse  to  reorgan- 
ize their  industrial  households  in  the  light  of  the 
modern  spirit,  will  rest  the  responsibility  for  such 

30 


REPRESENTATION          IN          INDUSTRY 

radical  and  drastic  measures  as  may  later  be 
forced  upon  industry  if  the  highest  interests  of 
all  are  not  shortly  considered  and  dealt  with  in  a 
spirit  of  fairness. 

Who,  I  say,  dares  to  block  the  wheels  of 
progress  and  to  let  pass  the  present  oppor- 
tunity of  helping  to  usher  in  a  new  era  of  indus- 
trial peace  and  prosperity? 


31 


